A special needs trust is one of the most important tools available under Ohio law which allows you to do something good with your wealth. If you have a child, grandchild, or other close loved one who has a disabling condition, you may wish to provide a financial gift to that person. Your financial gift could help to significantly improve quality of life for someone whose disabling condition may prevent him from working or from earning enough to pay for life’s necessities. However, if you do not make your gift using a special needs trust, your gift could actually end up causing a loss of important access to benefits. You do not want this to happen in your situation.
Zimmer Law Firm can provide assistance to clients in Ohio with the creation of a special needs trust. We can explain the differences between a first party special needs trust and a third party special needs trust. Our legal team will also help you to determine if you need a trust, and will assist with going through all of the formal requirements necessary to create the right type of legally valid trust if you do. Give us a call at 513.721.1513 to find out more about special needs trusts, the purposes they serve, and the ways to create one.
What is a Special Needs Trust?
A special needs trust is created to make it possible for a disabled person to have money used to meet supplemental needs, without that money being counted as a resource which would result in disqualification from Medicaid coverage and other government benefits.
Medicaid has strict limits on the resources a person can have while remaining eligible for coverage. Other programs, like Supplemental Security Income (SSI), also has limits on resources. Money or assets received by someone with special needs, whether from a gift, inheritance, or injury settlement, could result in a loss of access to these benefits, many of which they depend upon. A special needs trust, however, allows the trust to own the assets so they aren’t considered resources. The trust assets can be used for the benefit of the person with the disabling condition, but won’t be considered resources owned by that person.
The trust not only makes it possible to preserve benefits access, but it also facilitates the management of assets for the person who is disabled. A person who has special needs may be unable to handle the process of managing money on his own. A trust allows a trustee to invest the money wisely, manage it appropriately, and ensure that it is used to provide for things that the disabled person needs.
When Should You Create a Third Party Special Needs Trust?
You should create a third party special needs trust in any situations where you plan to provide financial resources or assets to someone who is disabled, if those assets or resources would push the disabled person above the limit for Medicaid or SSI resources. Since resource limits are very low, this means trust creation is necessary in virtually every situation where you intend to make a gift. You will be making a third party special needs trust since the money or property is not coming from the disabled person; if the money does belong to the individual with special needs or comes to that individual in the form of a personal injury settlement, then you would need to make a first party special needs trust instead.
You can make a third party special needs trust if you are giving an inter vivos gift, which is a gift given during your lifetime. If you are giving a gift after your death, creation of this type of trust is also important. You never want to be responsible for giving a special needs person money or property that causes a loss of access to important benefits. If you don’t structure your gift appropriately, all of the money or property could end up being spent on medical care and other services that Medicaid should be covering.
How an Ohio Special Needs Trust Lawyer Can Help You
To learn more about what an Ohio special needs trust lawyer can do to provide you with help in trust creation, you can download our estate planning checklist. You can also give us a call at 513.721.1513 to speak with a member of our legal team and get assistance in creating a trust that will allow you to best provide for a person who you love who has a disability.